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- July 20, 2026
Under the Pakistan Income Tax Ordinance, 2001, salaried individuals may reduce their tax liability by claiming certain tax credits and rebates (where applicable). These benefits do not reduce salary income directly; instead, they generally reduce the tax payable after calculation. The main provisions relating to tax credits are contained in Part X (Tax Credits) of the Income Tax Ordinance, 2001. 
A salaried person can claim a tax credit for charitable donations under Section 61 of the Income Tax Ordinance, 2001. This credit is available where an individual makes eligible donations to approved institutions such as certain educational institutions, hospitals, relief funds, or non-profit organizations. The amount of credit is calculated according to the formula provided in the section, based on the individual’s tax liability, taxable income, and eligible donation amount. 
Under Section 62, a salaried individual may claim a tax credit for investment in shares and insurance (subject to the conditions and limits prescribed under the law). This provision encourages individuals to invest in approved financial instruments by allowing a reduction in tax payable based on qualifying investments. 
Under Section 62A, a tax credit may be available for investment in health insurance, where the requirements of the law are fulfilled. This provision provides tax relief to individuals who pay qualifying health insurance premiums. 
A salaried person contributing to an approved Voluntary Pension System (VPS) or pension fund may claim a tax credit under Section 63. The credit is available for eligible contributions made during the tax year, and the amount is calculated according to the formula specified in the section, subject to applicable limits. 
In addition to tax credits, salaried individuals may also benefit from certain deductible allowances, such as Zakat under Section 60 and other allowable deductions provided in the Ordinance. These reduce taxable income before tax is calculated rather than reducing tax payable directly. 
Therefore, the important sections relevant for salaried individuals are Section 60 (Zakat), Section 61 (Charitable Donations), Section 62 (Investment in Shares and Insurance), Section 62A (Health Insurance), and Section 63 (Approved Pension Fund Contributions) of the Income Tax Ordinance, 2001. These provisions allow eligible salaried taxpayers to legally reduce their overall tax burden by claiming available credits and allowances.